My wife and I live in the Chicago suburbs. Our kids are out of the house and we are thinking about moving/downsizing, and I was hoping you would be willing to engage me in some discussion of some VERY general issues. We are pretty particular about what we are going to want out of our next home/lot, and suspect it may be difficult to find a home on the market which satisfies most of our major desires. So we are trying to figure out what would be involved in either building from scratch or doing a major addition/remodel of an existing home.

I guess my biggest general question is, how do we determine whether a home is a decent candidate for remodel/addition, as opposed to tear down? I assume we will want to establish a relationship with a contractor/engineer to inspect homes with us?

How do we go about locating such an expert? Would a contractor/builder generally be willing to conduct such an inspection for a fee, which might be credited against any services we later use them for? What factors ought we consider in determining whether a job is big enough to require a general contractor, as opposed to contracting it out ourselves?

For example, here is a home we walked around yesterday. The walls are concrete block, and I spoke with a neighbor who said it was a "very solid" house with no water issues. If I were to essentially gut it, replacing the heat/cool plant, water, and electric, wrap the whole house with EIFS, replace all of the windows, and replace the roof, and put an addition on the back enclosing the area whch is currently patio under roof. We'd also likely completely redo the existing bath, move the kitchen, and add another bath.

If we are doing THAT much work, would be be better off just tearing the whole thing down and starting from scratch? How much of home construction price could we expect to save simply by retaining the existing foundation and exerior walls? Are there any on-line calculators or other resources you recommend in trying to get a very general ballpark idea of the costs involved in various types of renovations/constructions?

I realize you will not able to give me any solid answers about this or other houses, and I expect to speak with professionals in person as this idea develops. But I was hoping your thoughts and experiences might help me get my head around this type of project. Thanks in advance.

Boy you ask a lot of questions, I think you have to go down the road a while before you can answer you own questions. Some of the things I can think of right now are:
What does the city say and cost of permits.
Cost of demolition and disposal.
Out here cost of demo is almost the same for remodal or a tear down, we have to remove drywall and insulation and concrete into different bins.
What is the home worth right now compared to the value of the lot.
If you consider the value of the house and demo, you may have a very expensive lot.
Cost of housing while your not living there.
I would find my own architect who can do the engineering for you, and then look for a contracter or three, otherwize you will end up with everybodies ideas and plans and you will be comparing apples to oranges.
I haven't made any easier sorry.

Boy you ask a lot of questions, I think you have to go down the road a while before you can answer you own questions.
...
I haven't made any easier sorry.

Hey, no sweat - and thanks for the response. Like I said, I'm just trying to start figuring out my options. And I will look into the factors you raise.

A little more background (in the hopes it encourages others to chime in):

-In the areas we are looking, it would be EXTREMELY unlikely that we will find a lot for less than $125K - prime locations could run $300K and up.

-We own our current home free and clear. I'd imagine it will sell for somewhere between $400-500K.

-We'd probably prefer to not spend a whole lot more than we get out of our current home for a new one, but if we had to to get exactly what we wanted, we could.

-While I do not consider myself rich (who does?), I do have an extremely secure job and no debt.

-As far as living during the work, we could either stay in our current home and take out a home equity line to cover construction which we would pay off upon sale, or we could sell first and move into a rental while we hunt and build. The first option would carry some additional "carrying charges" for the loans, while the second would incur rent. One final point, I have a guaranteed "buy out" of my current home, which relieves some of the stress of the home sale.

-How do I figure out the value of the house "right now?" I can look to the assessed value, but the house as is is quite rough. I guess you could live in it - (I'm presuming the utilities are functioning) - but I sure wouldn't want to. So even if I wanted to live in it as is, it would need a MAJOR aesthetic/comfort renovation.

So I guess I find myself slipping into the trap of looking at very large dollar increments. Take the $179K home I linked to. I find myself wondering woh much house we could get if we put $150-250K into an extensive remodel. Would that give us everything we want? Or would we be better off tearing down and spending say $300K building from scratch?

I see some additions/renovations which look so fanastic - and others not so much. I'm just trying to figure out how to develop an eye and sense for what types of homes could provide a good base, as opposed to which would be money pits.

Eds - First off. Why move at all? Assess what your needs are. You say downsize. Do you need the difference in price from what you have to what you may end up with (if any difference) to pay for retirement? Could you just retrofit/remodel what you have to better accommodate aging?

My guess is the house you linked to, given what you have written, would be a tear down. At that point I wouldn't even factor in the existing foundation. In the scheme of things its not such a major consideration. There is no way anyone can give you a ballpark price for such an endeavor but I'll try. Go with $125 per square foot of finished living space. More if you tend to go with higher end finishes, less if you are thinking cheapest everything. That number will get you at least in the same county if not in the actual ball-park.

Since you say "We are pretty particular about what we are going to want out of our next home/lot" I would begin by writing out every must have and nice to have. Make another list of every show stopper. You may have already done that if you are working with a Realtor. If a Realtor cant show you something that meets all of your must haves and a bunch of your nice to haves while not hitting any show stoppers then its time to meet with an architect. Have that architect draw up what you want and then take a smaller list to a Realtor that describes what you require in a lot and a neighborhood and what you cant live with.

For me, I have a rule. "No paint on the road". It seems silly but my theory is if a road requires painted lines then there is way too much traffic for my tastes.

First off. Why move at all? Assess what your needs are. You say downsize. Do you need the difference in price from what you have to what you may end up with (if any difference) to pay for retirement? Could you just retrofit/remodel what you have to better accommodate aging?

Right. We;ve done quite a bit of this analysis. Our biggest problem with our current house is that it is on a busier street and a narrower lot (50' wide) than we would prefer. Both of those are kinda tough to change thru remodelling! Also, I'd like a 3d garage bay, which cannot be added onto our house.

We are in a 5 bedroom house, in a kinda pricey suburb. But it IS very convenient for our jobs, family, friends, etc. This was a fantastic house to raise a family, and the easiest thing would be to stay put. But we both just turned 50, and with our kids out of the house, we are trying to figure out how we want to live for the next significant portion of our lives.

Since you say "We are pretty particular about what we are going to want out of our next home/lot" I would begin by writing out every must have and nice to have. Make another list of every show stopper. You may have already done that if you are working with a Realtor.

Yeah, we've pretty much done that. And we've looked with realtors off and on over the last couple of years, and checked open houses and such. That practice has pretty much made me think that building will be the best way to get the most of our wants/needs.

There are a lot of unkowns when you redo an old house, for what your talking about I think I would be looking for the ugliest house to tear down. Evan old foundation will not be built to take newer designs with open spaces and all that. Just check with permit dept. before you buy anything.

Yeah, I guess I should just start looking at the best priced houses as teardowns. I just wondered, because sometimes I see these MAJOR redos which look so nice... And I thought if it might significantly lessen the cost of a project.

My 2 cents, if you are going to buy and do a major remodel, you will probably be better off to scrape the lot and start fresh. Trying to match, out of square structure turns into a major pain sometimes. You may also have undersized structure that if not uncovered may prove to be an issue later. I love the way old remodeled homes look, you cannot duplicate old time charm, but it comes at a cost. Every one we've worked on would of been cheaper to start from scratch.

We bought a house and ended up gutting and tearing out most of it! I kept wondering if it would have been cheaper to tear down and start over. Our contractor said, No that even though the rebuild has been massive, it is still cheaper this way. Also if we had torn down, with our new city codes we might not could have rebuilt so check all that out.

Thanks, guys. I'll check the codes, but I don't think we'll have a big problem with teardown. Our desires are for a realtively modest house on a larger lot, so we won't have the issue of wanting to build too much home on a too small lot as is common in our area.

Talked with one contractor on our shortlist, and he said the larger the reno, the less would be saved compared to a teardown. In fact, he said he just finished an extensive reno at his client's wish, where he thinks the client would have been better off - and would have saved $ - with a tear down.

In our area the lots we seem to like tend to have older smaller homes on them - often ranches. Nothing of architectural significance which we'd feel a need to save.

Going to meet with this guy over the weekend. Will let you know what he says.